Barack Obama said at the launch: 'Imagine if no family had to feel helpless watching a loved one disappear behind the mask of Parkinson's.' Photograph: Charles Dharapak/AP

Barack Obama has launched an ambitious plan to map the human brain for the first time, in an attempt to seek vital clues for treating diseases such as Parkinson's and Alzheimer's.

The Brain Initiative (Brain Research through Advancing Innovative Neurotechnologies) will launch with $100m of federal funding, and there are hopes that it could create thousands of jobs in spinoff scientific and technological enterprises.

The funding – a tiny fraction of the $2.7bn that the Human Genome Project cost US taxpayers between 1990 and 2005 – will come from the National Institutes of Health (NIH), the Defense Advanced Research Projects Agency and the National Science Foundation.

The initial funding is enough to jumpstart the project, but it will have to attract a great deal more cash if it is to do all that the president and NIH hope.

Launching the initiative at the White House on Tuesday, Obama called on companies, research universities, foundations, and philanthropists to join in one of what he has identified as the "grand challanges" of the 21st century. Obama pointed to the long-term benefits for science, the economy and the human race as a whole of these huge scientific endeavours.

"Imagine if no family had to feel helpless watching a loved one disappear behind the mask of Parkinson's, or struggle in the grip of epilepsy," he said.

"Imagine if we could reverse traumatic brain injury or PTSD for our veterans who are coming home. Imagine if someone with a prosthetic limb can now play the piano or throw a baseball as well as anybody else, because the wiring from the brain to that prosthetic is direct and triggered by what's already happening in the patient's mind.

"What if computers could respond to our thoughts or our language barriers could come tumbling down. Or if millions of Americans were suddenly finding new jobs in these fields – jobs we haven't even dreamt up yet – because we chose to invest in this project.

Ideas are what power the US economy, the president said. "It's what America has been all about. We have been a nation of dreamers and risk-takers; people who see what nobody else sees sooner than anybody else sees it. We do innovation better than anybody else – and that makes our economy stronger," he said.

From computer chips to the internet, scientific invention has turned into products that have changed the world and advanced society. Google got their early support from the National Science Foundation. "The Apollo project that put a man on the moon eventually gave us CAT scans," he said.

The Brain project, however, is targeted on unknown territory closer to home. Human beings can identify galaxies light years away and study particles snaller than an atom, but, said Obama, we know little of "the 3lbs of matter that sits between our ears".

The brain contains almost 100 billion neurons, whose workings are mostly guessed at. The project will attempt to map these in action – something that has never been attempted. Scientists will first have to devise a plan of campaign. Just figuring out how to go about it will probably take a year and require huge effort and invention from computer scientists and mathematicians as well as neuroscientists.

The goal is firstly to try to shed light on the development of distressing and increasingly widespread neurological diseases such as Alzehimer's and Parkinson's, as well as conditions that develop in childhood such as autism, and acute afflictions that leave people severely disabled like stroke – and hopefully find new ways of treating them.

Beyond that, the project will help scientists understand how the brain works when it is functioning as it should. "The Brain Initiative will accelerate the development and application of new technologies that will enable researchers to produce dynamic pictures of the brain that show how individual brain cells and complex neural circuits interact at the speed of thought," said the White House announcement.

"These technologies will open new doors to explore how the brain records, processes, uses, stores, and retrieves vast quantities of information, and shed light on the complex links between brain function and behavior."

The NIH will establish a high-level working group to develop a plan, timetables, milestones and cost estimates, co-chaired by Dr Cornelia Bargmann from the Rockefeller University and Dr William Newsome from Stanford.